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Virtual Terminals: An Essential Payment Tool for Your Business

When it comes to merchant services, a virtual terminal is a key component of your payments arsenal. Whether you’re an individual merchant business, an e-commerce business with multiple sellers, or a software platform, this functionality provides the ultimate flexibility in processing digital payments.

What is a virtual terminal and how do they work?

A virtual terminal (VT) is an online application that works as a point-of-sale (POS) but without a physical device. Rather than swiping, dipping, or tapping a card, a virtual terminal lets you manually key in card numbers for a sale from a web browser.

You can use a virtual terminal exclusively or along with another gateway and/or an in-person POS. Most commonly, they’re used by businesses with low to moderate transaction volume. It all boils down to your specific business needs.

Payment gateway vs virtual terminal: What’s the difference?

The main distinction between a payment gateway and a virtual terminal is that with a gateway, the customer can enter their card information or use their card at a physical terminal. With a VT, it’s the merchant that enters the card data.

Another thing to note is that while both allow businesses to accept online payments, a gateway can be used independently, but a virtual terminal requires a payment gateway to function.

Why would you need a virtual point of sale and what types of businesses benefit from them the most?

A virtual POS provides businesses with more convenience and flexibility for handling payments. With a VT, you’re able to capture more sales and revenue by ensuring your customers can pay the way they want to. The top use cases are for virtual merchants, software platforms, and businesses accepting omnichannel payments that need:

  1. Credit card processing over the phone

  2. Mail order payment processing

  3. In-person payments without a physical payment terminal

  4. Backup for in-person terminal malfunctions

  5. SaaS fee charges outside of transaction fees

What are omnichannel payments?

Omnichannel payments simply mean that a business supports multiple payment options. You can pay online, in person, over the phone, by mail, or through mobile payments, or a mix of these.

What is a virtual merchant?

A virtual merchant refers to any business that sells goods or services online without direct interaction with customers.

One example of this is a magazine that offers subscriptions. While a customer could sign up for a subscription on the magazine’s website, many magazines take orders over the phone and by mail. Without a virtual terminal, they’d be unable to process these types of payments.

Another example would be an e-commerce website that sells its products exclusively online, over the phone, or through a mail-order catalog but doesn’t have a physical location.

Business use cases for virtual terminals

Virtual merchants aren’t the only business types that need a virtual POS. Businesses that accept online payments and/or have physical locations with in-person payment terminals also benefit from this functionality. Healthcare providers, restaurants, and retailers are great examples.

Ever call a doctor’s office or a restaurant and make a payment over the phone? If the answer’s yes, you’ve experienced a virtual terminal.

Another use case would be as a backup to your in-person terminal if a malfunction occurs. If there’s an internet connection, you can enter credit card details manually in the virtual terminal. This way, you don’t risk losing a sale because of technical difficulties with your hardware.

SaaS platforms can also benefit from a virtual terminal as it would allow them to charge SaaS or platform fees to their customers outside of transactions.

Staying in compliance

As with any payments acceptance method, keeping an eye on security and compliance is essential. One thing to keep in mind with a virtual terminal is that while data is transmitted securely, the credit card information is exposed to the person inputting the data.

You can significantly lower your risk by having a safe network, knowing your PCI scope, and staying PCI-DSS compliant throughout your process. Using a payments provider that offers a robust user management system like Finix is also vital to keeping cardholder data safe. This way, you control who has access to your virtual terminal, as well as any other payment-related features.

Best virtual terminal providers

Ultimately, the best virtual terminal provider is one that offers a complete solution and uses the latest tech. This way, as new trends and technology arise, your provider can accommodate you as your business scales and evolves.

At Finix, you get next-gen payment processing technology and merchant services, including a robust virtual terminal that lets you capture sales from various sources, making payment acceptance easier than ever.

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